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Rest Well, Robert Hughes

by Mike Ma

It is with a heavy, sad heart that I am writing to inform friends of kasina that Robert Hughes has passed. We knew him as Robert Larson-Hughes, as he was a Principal of the firm and also has served on our Board of Advisors after he left us in 2005.

Anyone who has been to our office should feel his presence. In addition to a number of other things I'd like to talk about below, he designed our office space.

Larry Cecil of Van Kampen paid us one of the best compliments that makes me think of Robert. Larry said, "This is exactly what I thought kasina's offices would look like."

Of course. It was designed by my friend, Robert Hughes.

In his short tenure with us, he left an indelible mark on our firm and me personally. I credit him with a lot of what I know about consulting and business. He challenged me on improving our process across the board for our clients. I still can hear him repeat one of his favorite Robert-isms, "All we sell is a process. So it better be good."

However, if I limited his credits to that I would be doing him a great disservice.

He taught me the value of surrounding yourself with a vibrant, passionate community. He was previously Steven's boss at McGladrey and came to work for his former employee because he thought Steven would stimulate him the most. He didn't need the money. He wanted to be in New York for personal reasons and wanted to be challenged. He thought we were the best fit. I don't know of many people whose pride would take such a back seat to his commitment to passion, learning, and community.

As I mentioned earlier, he also impressed on us the value of physical space. An MIT-trained architect, Robert graced us with his ingenious eye. If you have been here, you will realize that he placed a premium on community and elegant simplicity. He was a noncomformist who was savvy enough to conform when appropriate. He was a master of working with what was there and making it better.

All the things I love about kasina in our office. All Robert.

As you may see, I always sensed a kindred connection with him and it was solidified when he chose to move to Vermont after leaving us, not more than a few miles from me. It afforded me the luxury of seeing him more often than most others here at kasina. For that, I am grateful.

Robert, we will miss you.

Please hug your loved ones extra hard tonight. I know I will.

IT Credibility

by Johanna

When it comes to the expertise needed on e-business teams, skills that come to mind immediately include:

• Understanding of the business
• Liaison with sales
• Writing for the web

Absent from this list is IT expertise. e-Business teams today do a balancing act between Marketing and IT, and many are closer to marketing than they are to IT. Some could even be called Web marketers, not technical Web developers. The implementation aspects often fall to IT, and e-business focuses on having a good relationship with IT.

What does it mean to have a good relationship with IT? kasina has spent the past few months envisioning, developing, and implementing a Web forum where our clients post questions and engage in a dialogue with each other, and with us. As an observer of the building process for the forum, I gained a new perspective on the development process needed for the Web.

Within kasina we have computer science degrees, IT backgrounds, and on-the-job experience in dealing with the nitty gritty of technical Web site development. Personally, I have a background in finance and economics, and on-the-job experience in strategic planning research and consulting, which means I have little credibility with IT and Web developers when discussing time and effort. For example, when our outsourced IT partner quoted 3 days to enhance the forum, it was extremely valuable to have a colleague who knew that the changes should only take 1 day (actually, it should've taken 20 minutes). "A good relationship" with IT, coupled with a more in-depth knowledge of the technical aspects of the Web, meant that he could call them back and demand a faster turnaround.

While e-business still needs to answer to the business units and senior executives, and should avoid doing technical implementation better left to IT, having expertise on e-biz teams at both a strategic level and a technical level would allow the group to better succeed in the balancing act.

Eating Our Own Dog Food

by Lindsay

kasina has been talking for years about the rise of online social networking and Web 2.0. We've recommended that asset managers create venues for advisors, individual investors, and institutional investors to communicate about their experiences, share advice, and ask each other questions. We've pointed to the medical community, which has Sermo, an online network for physicians, supported, in part, by Pfizer.

But what about kasina's clients and other professionals in the asset management industry? Where can they go to share best practices, solicit advice from their peers, or ask questions about pressing e-Business and Distribution issues in the industry?

Starting today, they can visit the kasina Web Forum. kasina developed the Web Forum to give our clients a means to continue the types of conversations that happen at our Roundtables, and keep the dialogue open on an ongoing basis. The Forum is open ONLY to the industry, so registered participants won't have to worry about press or vendors trying to sell to them.

When users sign up for the Forum, they'll be able to:

• Post new topics and questions, or add replies to existing conversation threads
• Send private messages to other Forum members
• Create a profile and view the profiles of other members
• Search for specific topics or members

The Forum is still in Beta, and kasina is actively soliciting feedback from members so that we can work on improving it to meet the needs of our clients. Try it out and let us know what you think!

kasina Talks Smack

by Jessica

Things I never thought I would hear kasina team members say to each other:

"I desire that we be better strangers."

"Hell is empty, and all the devils are here."

And of course, the succinct but effective, "Peace, ye fat guts!"

We were hurling insults in my latest book report, an investigation of how to best say what you mean and mean what you say. How is a performance persuasive and what makes a dialogue productive? How does Much Ado About Nothing apply to, say, consulting? With a little help from John Barton's, Playing Shakespeare and Cicely Berry's The Actor and The Text, we spent an hour exploring some of the great Shakespearean snippets, as well as his seemingly endless supply of jabs and barbs.

It seems an odd way for a consulting firm to spend a Friday afternoon, but there's a lot to be learned from being nitpicky about the Bard's text. Shakespeare's vocabulary numbered over 17,000 words and he invented just under 1700 of those himself -- all of which we now use in modern conversation ("advertising", "radiant", "fashionable" and "compromise" are all of his invention). In the entirety of his work, he managed to use over 7,000 words - more than occur in the whole of the King James Bible - only once and never again. He knew exactly what he wanted to say, and precisely how he wanted to say it.

The vowels, consonants, alliteration, assonance and the syllabic structure of the lines themselves are clues that we use to discover their meanings and the ways in which they should be spoken aloud.

All of this textual study brings us, finally, to a place of performance. When performing Shakespeare (or any playwright), two truths become evident: You have to know what you are saying and you have to listen (even when the only lines assigned to you are Elizabethan trash talk).

Knowing what you are saying is fundamental, but often overlooked in performance, in business and in life. It means that you are equipped to speak passionately to your point, it means that you understand both the literal meanings of your words and their ultimate implications, and it means that you are working towards something active. You are informing, you are hurting, you are comforting, and you are inspiring.

Listening is the linchpin. It's in the listening that the actor achieves greatness, that the presenter makes a lasting impression on her audience, and that the acquaintance becomes a fast friend. In acting, you're in a dialogue -- with yourself, with the audience, or with a partner. In a vacuum, you might perform beautifully without listening. Give that same isolated performance without taking your cues from a partner on stage or listening to your audience, and your words ring false, flat, or just plain fail. Try giving a pre-prepared inspirational speech or reprimand to an employee without listening to their concerns, explanations or reactions, and you will lose them in your first few sentences.

In my most recent acting class, an instructor told us simply: Writing is acting is life. It's an equation that works for consultants as well as artists. You have to understand what you are saying in all of its complexity. Then you have to listen in order to learn the most effective and far reaching way to say it. Illuminating is consulting is life. Service is business if life. Motivating is public speaking is life.

Mainly, though, the book report was just Shakespeare and more Shakespeare. After all, there's only so much you can do in an hour. My kasina team members humored me and my obsessive enthusiasm for the complexity of speeches like the Chorus' opening monologue from Henry V.

Of course, patience has its rewards. Once we had worked on the famous speeches, we moved on to the Shakespearean insults. There's nothing more cathartic than listening to a coworker who has investigated what he is saying, how he is saying it, and what affect he wants to have on his partner, then cry out, "More of your conversation would infect my brain!"

His partner considers this, takes it all in, and finally responds with, "What a disgrace it is to me that I should remember your name."

Atlas Shrugged

by Johanna

Whether I was riding the subway, in an elevator, or even standing in line at the grocery store, the sight of Ayn Rand's novel Atlas Shrugged peeking out of my bag incited more comments from complete strangers than I'd ever experienced. Whether it was positive or negative, the sight of the title and distinctive graphic on the book cover received strong reactions from people who had read the book.

Whether or not you agree with Ayn Rand's philosophy, Objectivism, chances are that if you've read one of her novels (the two most famous are Atlas Shrugged and The Fountainhead), she's made you reconsider your view of how society should work.

Most of the Objectivist theory flows from the idea that "man is an end in himself, not the means to the ends of others." In Atlas Shrugged, Ayn Rand rejects the idea of "charity," and posits that societies who force individuals to give to the needy will ultimately fail. Objectivism rejects government policy that results in wealth redistribution, because it "punishes" individuals who have worked hard for what they've earned, thus draining the life from society's most productive members.

This book sparked an interesting discussion at kasina because most of us had already read and formed opinions about Ayn Rand's philosophy. The kasina culture is one that is very pro-giving, pro-charity, pro-assistance; however, we also operate in the private sector that benefits from many capitalistic freedoms. While no one fully agreed or fully rejected her theories, Ayn Rand's ideas provided good fodder for philosophical debate.

It Does Not Just Grow On Trees

by Michelle

While my memory is vague, I seem to recall getting an allowance as a kid, ranging anywhere from $3 - $10 dollars a week, hopefully increasing as I got older. I do not remember this allowance having any correlation to chores, or that it connected to lessons on spending, budgeting or saving. What this probably means is that I was spoiled and am now financially doomed. In a quick office poll on this subject, only one person talked about how her parents offered her financial options regarding different ways to smartly manage her $5 a week. (Her mother is an accountant.) Another person described getting a "mall" allowance. (She's from Southern California.)

But really, how do we impart basic financial knowledge to kids, both younger and older?

A few kasina team members have been teaching with Cents Ability, an organization that provides high school students with basic finance classes so they may work towards achieving their goals through informed money management. Topics covered range from goal setting, to creating a budget, how to pick a credit card, and introductions on the stock market and investing. It is a worthy and no doubt challenging endeavor. Math classes, and less frequently, accounting classes are the only way in which students might gain exposure to finance issues, but this is neither as direct nor explicit as what a class specifically on money management would offer. Cents Ability attempts to bridge that learning gap. A related and helpful Web resource for this question is Education.com. The site offers parents and educators a wide spectrum of information, including articles on:

• How to teach money management
• Understanding the cost of living
• Tips to foster financial literacy in kids

These links provide useful tips on how to help kids understand how we save to spend, compartmentalize and manage our money. As the adage goes, it doesn't just grow on trees.

27 up, 27 down

by Tricia

So here I am on the uptown 4, and what do I see from the El? Yankee Stadium and... Yankee Stadium. The House of Ruth and its progeny, side by side, like stalwart father and son.

Here I am with a watchful eye on Joe Girardi, feeling like Joe Torre has the map of Brooklyn on his forehead and has no business out in the land of Royal Palms and Sunkist oranges - but as the line goes, I haven't been happy since the Dodgers left Brooklyn. And if Jorgito's out for the whole season, I can cancel my cable.

Baseball puts me in a state of ecstatic bliss, but it also makes me think about what makes somebody great at what he or she does. I read a quick piece from the Times the other day about what makes Alex Rodriguez so good:

Turns out, beyond his considerable natural talent, he sets goals for himself and pushes himself to meet them. He practices hard and regularly. He persists. Through the doing of these things, he improves. He discovers his strengths and weaknesses and adjusts and learns accordingly.

These are the same things that go into great research.

Great skill doesn't come in dramatic cathartic bursts, although that makes for great theater. It comes through persistence, humility, the willingness to fail and learn. Research is a skill, not unlike batting, pitching, throwing, catching.

How do you get to be great? By doing. There is no other way. You can't talk your way to Carnegie Hall, and you can't think your way into the post-season. You have to show up.
Any novelist will tell you that they threw out half a million words to arrive at the 80,000 or so that ended up in front of you for $12.95. Half a million words. Ask Henri Matisse how many canvases he went through before he got a Moroccan curtain that wouldn't make him puke.

Sometimes I'll have a client say, "Oh, look, we're making money hand over fist; there's no good reason to do anything else." On the one hand, I could see the guy's point. The asset management industry's been having a good, long run; we pull down margins unheard of in other industries, even within other parts of financial services.

On the other hand, I wondered what would happen if Johan Santana, Derek Jeter, and Albert Pujols all decided that they weren't going to show up for practice today. Because after all, their numbers are so good, even among their own peers, both on and off the field. So they'll just show up for work and do what they were doing yesterday.

How long do you think they'd last that way?

By doing nothing, you are betting that no one is doing anything either. You're betting that you're such a fast follower that even if your competitor rolled out a paradigm-shifting innovation, you could still catch up before that innovation made you irrelevant.

You're saying you'd rather react to an event than be the event.

I know the "don't fix what ain't broke" idea has its merits, but every time I walk past that giant, glaring FOR LEASE sign at the corner of Court and Pacific, I keep picturing the guys at Blockbuster sitting around huffing, "Movies by mail? Video on demand? That's idiotic! Where's my bonus?"

How Do We Know What We Know?

by Tricia

My line of work depends less on what I know than how I know it.

Yesterday I walked out my front door on the way to work, and I knew it was spring. Not because the calendar says so; because of independent, observable phenomena.

I live in a brownstone above a 24-hour bagel shop on a street that connects most of the subway stations in Brooklyn Heights to the Promenade. For you Manhattanites and other foreigners, that's the tree-lined walkway above the BQE and East River, rhapsodized by everyone from Walt Whitman to Spike Lee.

From the Promenade, you can see most of lower Manhattan, including the Staten Island Ferry terminal and the building my little sister works in, One New York Plaza. To the right is the Brooklyn Bridge; in front of you is the Statue of Liberty. Heading left from her torch, you're looking at New Jersey, Staten Island, and the Verrazzano Bridge. You used to be able to see the Twin Towers.

So, as I was saying, I'm on my way to the 2 at Clark Street, and this is how I knew it was spring:
There's litter on my stoop: sandwich wrappers, cigarette butts, and empty coffee cups. People are eating lunch on the stoop now. Spring.

The cherry blossom leaves almost obscure the litter on my stoop. Cherry trees only bloom this time of year. Spring.

The door to the bagel shop is propped open. Sammy, the Trinidadian guy who works the graveyard shift, doesn't do that until he's satisfied that it's a civilized temperature. Spring.

The double-wide strollers and the meandering tourists have begun to clot up my street, turning my neighborhood into a resort town. Spring.

And of course, the most important thing: my TV is on the YES network almost every day, carrying major league ballet into my living room. Batter up!

Peace Rocks

Next Monday, May 5, from 6 to 11 pm, Peace Games will host an exciting fundraiser at the Hard Rock Cafe in New York: Peace Rocks New York. The event will feature a "Battle of the Bands" featuring bands that all include representatives from a financial services organization: The Bang (Morgan Stanley), Invisible Men (Giuliani Partners), The States (D.E. Shaw), and Behind Closed Doors (Capital Rock Advisors). A celebrity emcee will oversee the program, which will include a cocktail party, raffle, live auction, and an opportunity to hear about the impact that Peace Games is making on schools and communities in New York.

You can find out more about it at www.peacerocksnewyork.com.

As you may know, kasina works closely with Peace Games, an organization that empowers students to create their own safe classrooms and communities by forming partnerships with elementary schools, families, and young adult volunteers. We believe so strongly in the effectiveness of their programs that our CEO, Steven Miyao, joined the board of directors of the New York City chapter and we have donated part of our office space to their New York staff.

kasina is also proud that one of the participating bands, The Bang, features client and friend Rich Brereton, who is Managing Director and Chief Marketing Officer at Morgan Stanley Investment Management.

If you are able to attend, this will be a great event - and you'll see a lot of kasina friends and family there, too.

Me and Louie on the Stoop

by Tricia

Sitting on the stoop last night, my next door neighbor, a retired Brooklyn Navy Yard stevedore, asked me, "What exactly is this globalization thing?"

"Louie," I said. "This is one of the great questions of our time."

He chomped on his cigar. "Do you know, or don'tcha?"

I said, "The Vlasic pickle stork dropped it off on Pier 81 in 1991. Where were you?"

He said, "The one that talks like Groucho Marx?"

I think it's funny that the financial services industry likes to market itself as a bulwark of change and immutability ("Get a piece of the rock"; "The company you keep,") when really, it was the prime mover for one of the biggest paradigm shifts in human history.

"Globalization started as a campaign to move more cash faster around the planet," I said. "Around when Ronald Reagan and Maggie Thatcher were in office."

"Hold on." He popped the tops off two Rheingolds and handed me one. "OK, go ahead."

In the early 1980s, the leaders of the three biggest capital markets -- New York, London, and Tokyo -- looked ahead and realized that their domestic markets would be saturated in 10-15 years. They began a campaign to deregulate banking for the oldest reason in the world: to expand their markets.

Almost twenty years later, they got their wish: the member countries of the WTO signed 1999 the Agreement on Banking and Financial Services. Prior to that agreement, most banks could only operate in their countries. Exceptions were few, far between, and expensive. (That same year Congress also repealed Glass-Steagall, the law that forbid investment banks and commercial banks from operating under the same roof. That's why Citibank was able to buy Travelers and Smith Barney or why JP Morgan could buy Chase.)

The fact that banks could now effectively operate across borders intensified the utility of things like 24-hour markets, e-trading, and currency consolidation. It made it easier, cheaper, and faster, to move money across borders: cheaper capital, bigger balance sheets, and more service options=more trade. More trade=more globalization.

"That's why," I said, "when I went to visit my sister in Paris in 1988, I had to take traveler's checks and dollar bills. Now I get on a plane with my passport and my debit/credit card and still get a better rate."

"That's crazy," he said. He glanced at my half-finished beer. "You gonna finish that?"

What To Do With Gen Y

by Steven

Over the last year I have had a lot of discussions with clients and kasina employees about working with Gen Y. Generation gaps exist for all generations, and the gap between Generation X and Y is becoming more and more apparent. One day, those of us in Generation X woke up and realized that we didn't understand our young employees anymore.

"I don't feel like doing this kind of work."

"I am really frustrated right now."

"Do we need to meet about this in person?"

Gen Y, which includes individuals born between 1979 and 2000, consists of approximately 76 million people, 20% of the overall population. They already represent 10% of our workforce -- this percentage will double by 2012.

Why then, do those of us in Gen X just sit here sipping our coffee and complaining that those in Gen Y don't know how to conduct themselves in a work environment, instead of taking the time to identify productive ways to solve these challenges? The fact of the matter is that outside of the Baby Boomers, Gen Y is the single largest segment of our society. We only have two choices:

1. Stick our heads in the sand and hope that Gen Y will go away
2. Adjust our organizations and inspire Gen Y to work with us

It is interesting to learn about why they are so different from us. Most of the discrepancies can be traced back to their baby boomer parents. Most of the Gen X parents are from the Silent Generation (born 1925-1942, now age 66-83) who told us that we would not amount to much unless we worked hard and proved ourselves. Baby Boomer parents, ensured that their Gen Y kids had every modern convenience, told them every day that they were special and that they were winners no matter what they did.

A client of mine actually received a phone call from the angry mother of an employee who wanted to register a complaint about her daughter's performance review.

This method of childrearing has resulted in Gen Y having different expectations of the office environment than we had when we started working.

Here are a few Gen Y traits that we, and others, have identified:

• They want their work to mean something personally and to be identifiably important to their company. They want to have a tangible understanding of how their tasks connect to the overall mission of their organizations.
• Traditional advancement isn't as important to them as feeling useful and having a meaningful experience.
• They are the confident products of encouraged self-esteem and educational opportunities.
• Friendship is such a strong motivator for Gen Y workers that they will choose jobs just to be with their friends.
• They are connected and technologically adept. They use cell phones and the Web as their primary means of communication.
• They believe that they can do it all.

I have started to understand that the key to working with Gen Y is to effectively cater to their unique preferences and needs. Here are some examples:

• They can be very loyal if their needs are met, but they are not unquestioningly loyal or intimidated by hierarchy. Gen Y wants to know they are compensated fairly for the work they put in.
• It's not precisely true that Gen Y doesn't want to do "grunt" work. They actually don't mind it as long as they know why they are asked to do it and how it contributes to their personal or professional growth.
• Many Xers complain that Yers require too much praise. They do want praise, but we are responsible for setting expectations and guiding them appropriately toward the objectives that the company has set for them. Often times their priorities are misaligned with the company's priorities for them, and that leads to miscommunication and the feeling that they are being unduly criticized.
• We try to give our employees flexibility. For kasina, and for Gen Y, it is more about the total output than about where and at what time the works gets done.
• Gen Y feels special and they want to have personal responsibilities. This means that every employee needs to have their own goals and metrics for success.
• We need to be more successful in laying out a clear sense of where they can go in the company, how they can get there, and what they will have when they arrive. By laying out this clear path, Gen Yers are more likely to buy into the objectives of the firm.
• We work hard not to treat them as if they don't have the necessary experience. We have learned that honesty and directness is what they value most in us.

It is not just that the Gen Yers have to adjust to us. We need to adjust to them too.

Alexander Hamilton, Bad Samaritans, and the Need to Challenge Conventional Wisdom

by Lee

Since I've started watching the "John Adams" mini-series on HBO, I've become more interested in reading about the real stories behind the founding of the United States. This Sunday's Part 5 finally introduced us to Alexander Hamilton, the first Secretary of the Treasury. Hamilton was one of the more intriguing characters I read about in Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang, the book on which I did my most recent book report. In 1790, Hamilton introduced the "infant industry" argument for protectionism. The policy (that nascent industries do not have the economies of scale to compete without protection) is commonly dismissed by today's mainstream economists, but -- as Chang points out -- is largely responsible for the United States' rapid ascension to world power.

The central theme of Chang's book is that poor countries can get rich only by doing the exact opposite of what they are told by the World Bank, the International Monetary Fund and the World Trade Organization -- the "Bad Samaritans" referred to in the title. I found it fascinating how today's advocates of free trade only lowered tariffs after their industries had firmly established their lead over rivals. The book had numerous examples of how today's commonly accepted principles are frequently not the pre-conditions to economic success that they are seen as (e.g. low inflation, lack of corruption, etc.). The biggest lesson that I took from the book, however, was something I try to keep in mind when approaching all of our research: that it is always necessary to question conventional wisdom.

Standing on My Green Soapbox

by Mike Trapanese

It's official: Green is the most trendy color.

A movement that started on the fringes has officially hit the mainstream, with behemoths like GE and Starbucks looking to cash in on newfound commitments to the environment. In the financial world, the rise of Environmental, Social, Governance (ESG) investing amplifies the trend in parallel. Even Goldman Sachs has gone a little Green, getting its share of an investment niche approaching $3 trillion in the US alone.

Pleas to jump on the bandwagon now resonate from politicians, pundits, family members, shopkeepers; even soccer moms, pointing proudly to the "hybrid" labels on the tailgates of their Tahoes, are pro-Green. If the Green Movement has achieved nothing else thus far, it has at least raised awareness.

This has translated into two noteworthy (if temporary) accomplishments:

• A price premium for Green products and services
• An increase in investment capital for alternative energy firms

But despite the newfound predominance of the movement, change is still only moving along the fringes. Our economic system--one which requires gluttonous resource consumption to run smoothly--is still fully intact.

To simplify, there are two basic problems: the amount that we consume, and the methods of production that enable this consumption.

To simplify once again, there are two potential solutions: sacrifice (substitution, cutting back) and invention (new goods, markets, industrial organizations, methods of production and distribution, etc.).

The Green Movement puts the most emphasis on the former: take public transportation, use energy efficient appliances, avoid Styrofoam cups and plastic bags, stick to local produce, and so on. But these types of changes can only tackle the underlying problem at the margins, as sacrifices at home are more than offset by increasing production in the developing world. Furthermore, they stand to lose effectiveness when the Green trend loses luster (as most trends eventually do).

Sacrifice alone is not a viable solution to our environmental woes, neither in the near nor distant future. Invention will have to play a fundamental role.

Joseph Schumpeter popularized the notion of creative destruction: that process "that instantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one". He labels it "the essential fact of capitalism".

Any tenable solution must operate on this scale, by changing our patterns of consumption and production from within. Attacking global warming by driving hybrids is the equivalent to treating influenza with Dayquil; it makes you feel better in the meantime, but does nothing to address the root cause. The revolution that will truly deliver us from our environmental crisis will roll on the wheels of invention.

The tricky thing about invention, however, is that it happens through no clear recipe. Thus we reach an impasse. We cannot continue as we do, but we cannot yet see an alternate route. Likely, there is no way out because we have not yet created one.

To weigh once more on Schumpeter: "the problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them". Only through education, incentives, and markets for ideas can we ensure that a tenable solution emerges in time. The Green Movement has brought the problem to our attention; the Green Revolution will deliver us from its grip.

Taking Stock: You, Me, & The Internet

by Michelle

I'm that girl who really liked writing papers in college and grad school. For my first kasina book report and in a spirit of simultaneous over and under achievement, I created what would otherwise be a failed research paper. With a fair amount of creative license and some attempts at humor, I tied together sources that would probably not connect harmoniously in a written piece, but seemed to come off as a success as a Powerpoint Presentation:

• Against the Machine, Being Human in the Age of the Electronic Mob by Lee Siegel
• "The Ecstasy of Communication," by Jean Baudrillard
• "Web 2.0: The second generation of the Internet has arrived. It's worse than you think," by Andrew Keen, the weekly Standard, February 2006
• "The Six Stages of E-mail," Nora Ephron, Op Ed, The New York Times, July 2007

Why is this relevant? We here at kasina are highly adept, heavy Internet users and Web 2.0 advocates. For good reason: this technology helps us and our clients do business efficiently and intelligently. My interest here was a humanistic one: What of, dare I say, our mild or major addiction to this infant medium? How are we affected by it personally and socially? How do we carve out a space for a life apart from it and apart from economics? How has the advent of the Internet affected how we think about self-expression versus art? What is the difference between information and knowledge? Does e-mail actually create "connectivity" or in fact, just the opposite? How has our privacy been affected? While we will not necessarily change our current behaviors or quell the significance or momentum of THE INTERNET, the presentation, via Siegel's book and related articles, was a small effort to consider how we are all so fundamentally changed by its existence.

It being Easter time, I feel I must also mention our new system of using "ducats" during Friday's book reports. What's a ducat, you ask? At kasina it is a small plastic egg, the kind you ordinarily might receive with a chocolate surprise inside. Here we receive them empty. Their function? They break in half, leaving each one of us with two pieces, representing our two opportunities to voice our opinion on the topic at hand. Anu originally told me the word was spelled "ducket" and is Olde English. I looked on the Internet and couldn't find it, so I didn't believe him. Carol set me straight. Dictionary.com offers that it is slang for cash money. So much for carving out a space apart from economics. And, of course, the utter convenience of the Internet is not lost on me. Regardless, a "ducat" at kasina is a turn to speak. You do this by tossing your piece into the center of the room.

I mention this because I was both pleased and alarmed to find that certain questions raised in this book report sparked such fierce debate that, at times, it was like watching a festive deluge of pastel colored shapes. Will even stole a ducat for a third turn. The questionable behavior of our marketing director aside, I do believe this is an important topic, and I am happy to work in a place that creates a forum for such discussion.

Confessions of a working actress...

by Elizabeth

Can I tell you a secret?

The truth is, though I am an artistic assistant in kasina's Business Development department, I am actually an actress.

I know, shocking!

Ok, it's actually not a secret at all. I answered kasina's job post for an "actor, painter, writer, or poet who needed a support job" in July 2007 with both curiosity and eagerness, and I have been happy here ever since.

The reason I am able to work successfully in both worlds is that kasina encourages me not to separate my life into categories or "work/life balance," but instead to think about how I can be the best in both categories.

Other actors might criticize the fact that I do something not acting related to support myself while working to become more established. A lot of actors go on unemployment during the lean times to stay focused on getting more work. Others work at bars from 4pm to 4am to make money. And I think that is great for them. Honestly!

But, I am excited to work with a wonderful group of people who acknowledge that I have a lot of skills and allow me to exercise those other talents while staying true to who I really am.

As my turn to host one of our weekly book reports approached, I knew I wanted to present a play. After research and a very helpful Drama Bookshop employee, I found Hold Please by Annie Weisman -- the comedic tale of four female office assistants -- Jessica, Grace, Agatha, and Erika -- and their roles within the company and relationships with one another. Grace and Agatha are career administrative assistants, working with the company for over twenty-five years. Jessica and Erika are in their early twenties and see the future as a blank canvas that they will fill, just as soon as they know what they really want to do with their lives.

In researching for my book report, Mike Ma also gave me the interesting Harvard Business Review article "Task, Not Time: Profile of a Gen Y Job" by Tamara J. Erickson to read. The article talks about how Gen Y employees, (me!), prefer jobs defined by task and not time, therefore wanting to be compensated for what is produced.

After reading the play and article, I walked away thinking about the important issue of time and what one decides to do with his or her time. Some, like the character Jessica, see a job as just something she does during the day and is not emotionally attached to whatsoever. It's her life outside of her job that she cares about. Others, like Agatha, are so entrenched in her job that it defines her and is incorporated into all aspects of her life.

Who knows...maybe someday I will get the other artistic assistants together and direct them in a production of Hold Please in the ideation room...at kasina, the possibilities are endless!

The Lion and the Mouse...

by Will (part 3 of 3)

In the last few months, I've been at two different events at the United Nations, one was for members of the Public Relations Society of America and the most recent was the Investor Summit on Climate Risk. Each time, I walked away with the question of how a small company like kasina can make a difference globally. The interesting, and unexpected, thing is that it was the UN that posed the question to me.

The UN Fund for International Partnerships and CERES have made it clear that my thinking that a company like kasina can't make a global impact was wrong. After listening to their presentations, I realized my thinking hadn't been consistent -- after all, there isn't an asset management company out there I don't think kasina can help, and many companies in this industry are bigger than the UN. But still, it seemed to me that the UN was just too big, too much of a monolith to make a real contribution to.

It's rare that being wrong makes me so excited. The applicability of our expertise never seemed more apparent, even if it isn't applied in the usual way. The UN helps small business in impoverished areas get a head start. Can't businesses like those benefit from business plan experts? How about getting out the message of the good work a lot of UN agencies are doing, can't that messaging benefit from people used to improving marketing?

And what about the asset management industry and environmentalism? kasina cares deeply about environmental issues, as does the UN, and the Investor Summit made me realize that we're in a good spot to talk about green product development and guide clients through all its pitfalls. It also made me realize that what's being done now isn't as comprehensive or profitable as it could be. I know I'd like to help, and I'd like to see kasina help, and with a partner like the UN, I feel like the sky's the limit. Hopefully you'll be hearing about this more down the road.

A Quick Disclaimer...

By Anu

As many of you have by now noticed, we just launched our new kasina Web site. After receiving a few messages, I'm compelled to say that this is a photo of me. And I am not holding anything, um, illegal: they're hops. I'm a fan of big, American ales that use large quantities of hops.

A Culture of Trust

by Johanna

At our most recent winter strategy offsite, we spent a lot of time talking about our culture and how we relate to each other. One theme was pervasive: trust is fundamental to the smooth functioning of our company. Trust remains critical amongst coworkers, but is becoming tougher to achieve for a few reasons, including the following:

• Everyone's Working From Home: Instituting "Flextime," or giving the option of working outside of the office, gives people the freedom to pick the place and time that will be happiest and most productive, but also requires collective trust that we're all working our hardest.
• We Prefer Anything But In Person: Even when everyone is in the office, e-mail instead of face-to-face communication is often the way coworkers relate to each other. While it may be efficient, e-mail doesn't communicate tone and body language. Electronic message recipients end up doing a fair amount of interpretation of short, quickly-written e-mails.

One way that we foster trust is through our company offsites. We spend three days, two times per year, reaffirming our mission and learning more about each other as individuals. Discussing the future of our firm, having open dialogues about our culture and how to improve it, and even cooking meals together helps instill that critical trust that we are all working toward our collective success.

Cutting edge companies are using the idea of leading with trust, as opposed to fostering an environment in which employees need to earn it or prove they are worthy of it. For example, Apple uses the concept "Assume Positive Intent" as one of its core values. The idea of leading with trust is also fairly well argued in the short essay "Trust CAN Possibly Be Good."

How can we as leaders and as individuals promote a workplace that leads with trust?

Love Your Day Job

by Mike Ma

"Enjoy that perfectly made beverage!"

"Sir, that is the world's finest espresso you can get. Please enjoy it."

"Ma'am, that cappuccino was made perfectly by the finest barista on the east side."

"Sir, that latte was made perfectly by the finest barista on the east side... or the west side, for that matter."

I was having coffee at a Starbucks at 47th and 3rd and I heard a loud Brooklyn accent bellowing out the above statements. Instead of just saying "Vanilla latte!" when a drink was completed, this gentleman endorsed his own product with such authenticity and enthusiasm it was hard to not get excited about what you were drinking, or at the very least be pleased and amused.

As the typical turn-of-the-year take-your-bonus-and-run season is upon us, I encourage everyone to think of this guy who probably makes an hourly wage. He took a potentially mundane, low-paying job and exerted a lot of pride to his work. Before you consider jumping ship, I encourage you to consider, for a few minutes, if you feel half as enthusiastic about your job as this barista does about his. To that end, I am spending this part of the year asking myself:

• How can I make my job more interesting?
• What are the things that I control that can make me excited about my work?
• How am I mastering my own fate and controlling my own happiness?

Forget budgets, comp, headcount... While most of the people in our industry have an income I will guess is at least a solid order of magnitude more than that of the Brooklyn Barista, I entreat you to ask yourself: are you half as happy as the Brooklyn Barista? What can you control to affect your own happiness?

Another Starbucks Question

by Corianna

In December, Lindsay wrote a blog piece inspired by Mark Penn's new book, Microtrends: The Small Forces Behind Tomorrow's Big Changes. Lindsay recounted Penn's comparison of "Starbucks economy" of today, to the "Ford economy" of the twentieth century. Penn argues that consumer attitudes have moved from the ideal of mass production to that off mass customization. Starbucks, with its crowded menu of caffeine, milk, and flavor combinations, is undoubtedly the poster-child of 21st century customization. Who, Lindsay asked, would be the Starbucks of the asset management world?

In some ways, the asset management industry, with its cornucopia of funds, already looks a lot like Starbucks' menu. Indeed, you might think that everyone should be able to find what he or she is looking for from the industry's innumerable offerings.

It's not that simple, though; offering many things is not synonymous with offering customization. Customization is about more than just options; it's about experience. I suspect that customers--advisors and investors alike--aren't exactly awash in waves of joy when they see long mutual fund product lists. They are, I imagine, rather overwhelmed. I think it's time to step away from the Starbucks analogy. It's time to ask what customization asset-management-style looks like. And there's an answer: customization, asset management style, looks like UMAs. So, I'd like to tag a line onto Lindsay's question: Who, I want to know, will be the first to make UMAs available to the average asset management customer?

Tying it All Together

by Lee

As we put the holidays behind us and move into a new year, most of us also leave behind performance review season. Many of my friends were complaining at various holiday parties about having to "waste" so many hours on performance reviews, discussions about bonuses, and other year-end rituals. While certainly time-consuming, I see these efforts as anything but a waste, if done properly (a big if).

While many (surprisingly, not all) firms conduct performance reviews with their employees, most fail to tie their performance measurement, compensation, and employee development systems together.

Several of our clients, for example, conduct annual performance reviews for their wholesalers that highlight strengths and weaknesses. The training wholesaler efforts at these firms, however, are one-size-fits-all: no special training efforts are made to address weaknesses.

Compensation systems are no better: all too often, we hear from our clients that their employees get paid what the client "thinks they should make" rather than what they have earned. One friend achieved all of her performance objectives for 2007, yet received virtually no year-end bonus, while another missed most of his objectives but was thrilled with his bonus.

An effective, holistic approach to performance measurement should:

• Align individual employee goals with organization objectives (when employees succeed, the company should, as well)
• Measure employee performance objectively, fairly, and accurately (metrics should not be subjective)
• Focus training and development where it is needed most (individualized training plans should be created to help employees' careers grow)
• Tie employee performance to recognition and reward (performance reviews should have a significant impact on compensation)

When done properly, performance reviews become a valuable roadmap for employee success, and not simply another task to complete.

Book Report: Overwhelming Overtreatment

by Andy

Shannon Brownlee's new widely acclaimed book, Overtreated, is an insightful look into the negative effects of America's obsession with the marvels of modern medicine and the underlying institutional problems that allow for its misappropriation. The obsession is so engrained, she argues, that a good deal of treatment is unnecessary and ultimately dangerous. Furthermore, she describes via detailed cases where these expensive treatments upon thorough scientific inquiry as not proven effective. Overtreated clearly illustrates how economic incentives govern the workings of a fragmented system that is in need of repair.

The book uses the shock-and-awe strategy of extreme anecdotes that are typical of this genre to illustrate why this 'overtreatment' is occurring. In the process, Brownlee does an excellent job of illustrating supply-induced demand of medical care. She also broaches the delicate underlying cultural challenges that need to be overcome in order to reform the system. She is critical of the on-demand care that the current system provides and for which the medical community is ultimately compensated. She also recognizes how profits drive various components of the system not just out of avarice, but out of necessity of survival - such as non-profit hospitals using the profits from lucrative procedures to subsidize care to the uninsured and money-losing operations such as urban ERs.

The book points to evidence-based care, which she sees as the lynchpin of success of the Veterans Health Administration (VHA), and which she holds as a case study that she opines for the medical community as a whole to embrace. While Brownlee definitely offers insights into some incremental change that could improve healthcare, her argument ultimately commands that the medical system and the way Americans view medicine be entirely revamped. It is both a validation of the power of the country's economic engine in relation to healthcare and a critique of its negative effects.

One Bad Apple Spoils the Barrel

by Johanna

Determining if a job candidate is a cultural fit is one of the most important criteria to look for during the recruitment process. Often, organizations learn the hard way: by hiring job candidates with superior experience and skill sets, but ignoring the nagging suspicion that the person may not gel with the culture. It's tempting to ignore your gut in favor of getting someone in the door, but hastiness can mean that an entire team effort and group synergy is brought down by one individual. On the flipside, hiring a team member who is a cultural fit reinforces those dynamics that are critical to the group's success.

How do you define culture? I always thought it was similar to determining if a joke is funny - you know it when you hear it. However, defining and evaluating the culture fit of candidates is one of the most important parts of recruiting. One blogger uses a poker game as a pretty fitting example.

Here at kasina, our culture is built around characteristics like the following:

• A love of learning
• Creativity
• Focus on team
• Passion for new ideas

Culture is influenced by each member of an organization. Each addition to the kasina family has a noticeable impact -- this makes the stakes high for choosing whom to hire, and means it's worth waiting to find that perfect fit.

Even though financial services firms and distribution organizations can be 10 (or 100) times the size of kasina, each marketing and sales team should take the time to define the current status and vision for the group culture. For example, one e-Business group puts job candidates through an extremely rigorous hiring process that involves interviews with both junior and very senior members of the firm. In any of these meetings, if a candidate repeatedly uses the word "I" instead of "we," it raises flags that that person will not fit within the close-knit team environment.

Cancer and Hope for the Holidays

by Mike Ma

As the holiday season is upon us, I've spent a lot of time thinking about why I like the business that I am in -- it really comes down to the people I'm lucky enough to meet in my tenure at kasina.

It's with a heavy heart I point out two dear friends of the firm who have recently been diagnosed with cancer. While their situations are indeed unfortunate, and I get teary-eyed just thinking about them, their strength, humor, and resolve truly give me something to think about and learn from. I'd like to honor them with some real estate on our little part of the internet:

• Jenn (Grady) Dorsey has been a client and a friend that I got to know during her tenure at Columbia Management. She has a laugh that can brighten a room, and chances are, she's the one who told the joke. I've been admiring how she can make me cry and laugh at the same time. Please visit her and show her some love at CaringBridge.
• Dave McCalley at American Century is one of the most focused, talented people I've ever come across. Whether it is in his job in connecting with shareholders, or playing the trumpet, or advising national teams on long-distance running, he brings an intellect and passion that is amazing to everything he does. I find inspiration from him at his blog.

I think cancer has picked two people who shouldn't be trifled with, and I feel lucky and honored to continue to learn from them as they pull through these difficult times.

In the meanwhile, I'd ask that people honor them through their own efforts ... leave a note or a comment on their sites, or make a contribution. We are proud sponsors of Mutual Funds Against Cancer, and hope that you can become more involved, too.

The Attack on Ivy-ish Education

By Mike Ma

At Steven's behest, I am cross-posting this from my personal blog where this post went up yesterday.

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One of the things that I have been most challenged with in the last few months is hiring and managing people. As anyone can attest to -- it's damn hard.

A standard recruiting playbook would say, "Scour Harvard, Yale, Stanford and a number of other elite institutions for the next 'rock star.'" The problem is that most of them (and I want to stress that this is not all) ... ahem ... well, how do I say this ... are jerks. (I say this as a recovering "jerk.")

The more politically correct recruiting parlance is to say that they are "not a culture fit." But there is a selfish immediacy to the way that I see a lot of recruits approach their work. As if they are too good for the work that they may get. And while I think entrepreneurial vigor is to be admired, there is something that has been offputting and I think there is something to the way that elite institutions educate.

Basically, we are taught analytical skills but business is really a synthetic exercise. To put it another way, an Harvard grad can give you a Hoopes Prize thesis on why Humpty Dumpty shouldn't have fallen off the wall (or been on the wall in the first place!), but business requires us to think about the quarterly project plan on how to get him back (or outsourced overseas for 1/10 the cost!).

This is the attack on Ivy-ish education.

Causes? Well, I think it is how we are taught. That is, we are taught to try to deconstruct these great theorists we read about as part of our formal education. Say, pick apart Descartes' proof for the existence of God. Most of what we are taught is how to pick things apart. Pick. Pick Pick.

Fast forward to work, what happens when you take your first entry level job? Your boss is a ten year veteran with a BS from Ohio State. Surely, I must be smarter than that him, no? And so begins the professional picking ... pick pick pick. But this time, no A's are given. You are most likely laid off or opportunistically downsized. (I was ... though the CEO of a former employer actually wanted to fire me for being a smartass, but I made it to the next round of layoffs).

One of the things that I am proud of at kasina is our Book Club and weekly book reports. Each week we present a book and figure out what we can learn. They have been invaluable to me in my development as a businessperson and a person in general.

However, one of the common criticisms is, "This book is crap." "They are not that smart." Or just ..(cover your ears) ... "Bullshit." It takes an inordinate amount of retraining and reprogramming our people to see the value in these works in a way that doesn't reduce to picking at them like an academic work. But should we be surprised given how we educate at the elite institutions?

We need more synthetic tolerance in our higher education. Personally, I've found the more effective approach has been to really force yourself to think about how do you apply this concept to what you are doing today. What is the unique thing that someone else can teach me? The Ivy arrogance has got to go.

Some of the work that Malcom Gladwell's work around persistence and cooperation is instructive (10,000 hours to mastery, regardless of field). Also, Dan Pink's work about A Whole New Mind is as well.

Being More Naked on Our Blog

by Conrad

In our last book report, Carol talked about "Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers," a book about corporate bloging. One of the main points in the book is that blogs have to be personal and passionate, and this sparked an interesting debate on how we could make our own blog better.

To make a long story short, we decided to ditch our usual blog-writing process to encourage people say whatever they want. So you will hopefully see more creative ideas on here. If somebody passionately thinks that firms should base their investment decisions on fortune tellers, for example, he can now make a case for it here. We might disagree, but it will hopefully spark some good conversation.

Training Gaps Abound

by Lee

It has always amazed me how little emphasis is spent on training in the asset management world. While many senior executives speak about the importance of training, the area is typically under-funded with little strategic direction. In fact, the training budget is typically the first area cut when firms look to lower costs.

I've had a chance to spend a fair amount of time thinking about training as part of several recent client engagements, and have seen three common gaps:

• Focus on Training, not Development: Training at asset management firms is most frequently directed at new hires or focused on new products. Many firms will also conduct sales training as part of their national sales meetings. Training, however, is typically designed to bring people up to speed, or to refresh knowledge or skills (e.g. "Here's how to use the CRM system," or "Here is insight into how the PM manages this fund"). Rarely do firms think about true employee development. Focusing on development requires firms to answer "what are the skills or knowledge that could allow employees do their jobs more effectively, be happier, and get to where they want to be in their careers?"


• Lack of Personalization: Group training definitely serves a purpose, but not everyone has the same gap in skill or knowledge. For example, one experienced external wholesaler may need extensive product-related training, but minimal territory management support, while another may be a product expert, but need extensive one-on-one coaching around how to run an effective meeting. Each individual should have a personalized development plan that is tailored to his or her needs.


• Lack of Integration with Performance Reviews: Even organizations that have sophisticated training and development programs in place typically fail to tie these efforts to employee performance reviews. Without setting clear goals for individuals regarding training and development that have a direct link to performance appraisals, training remains an afterthought.